Hi everyones,
last week, I red a little about the Martingale. I heard that some traders use this strategy, but it looks as a betting system to me. I don’t know if someone haves positive results with that. 
For them who don’t know what the Martingale is, it is when you double your lots each time you lose 30 pips for example.
So, if someone can help me about that, it could be fun.
(Scuse me for my english mistakes, I speak French)
Best Regards, Bammy96:)
Since markets generally do not move straight up or straight down, martingale strategies could theoretically work, but you would have to have very very deep pockets to cover the extremly significant drawdowns you would no doubt encounter. Odds are that you would go bust before you knew what hit you. Stay away from Martingale.
That said, however, there are strategies out there that average down or dollar cost average into positions as they move against the trader. I’m sure many out there disagree with this appraoch as well, but as someone once advised me, if done with low leverage , in a low volatility market that tends not to trend too strongly, then you could successfully implement it.
Bammy,
J’ai oublie demander. De quelle ville tu est?
That does sound like gambling. Remember the idea is to limit your losses. Lets do the math you buy 1 lot it goes down 30 pips so you buy 2 more lots and it goes down another 30 pips so you buy 4 lots? Or do you just buy 1 lot everytime it goes down 30pips?
Lets assume that 1pip is $1.00USD just to keep it simple, in the first case you would be down $120. Yes you only need a 30 pip move up to break even, but on the other hand if it moves down another 30 pips you are now down $300. What if this is one of thoes trends that move 700 pips over a 6 week period? I don’t want to do the math on that but I think you might need about $50,000 to sweat that one out.
In the other case you would only be down $90 and would still only need +30pip move to break even. So if it went down another 30 pips you would now be down $180. Now you need a +45 pip move to break even. It only gets worst the more you go.
Either way you look at it your just better off taking your 30 pip loss and learn what went went wrong. You will keep more of your hair that way.
If you still don’t belive me then open up a demo account, with an amount that you would go live with and see how long it takes befor you lose all your money.
Martingale is mathematically known as “gamblers ruin”.
Need I say more.
If you really want to know the perfect gambling system that really works mathematically and gives you a true statisical edge (you win in the end), then click the following hyperlink :
There is a lot written about Martingale and modified Martingale systems (in the latter you stop at some point and restart from x1) The problem is the market can always do what it has never done before and so the seeds of destruction are sown into these systems- just look at Long Term Capital Management and what happened when asset classes suddenly correlated in a way previously unknown. I agree with the post about gamblers ruin, it is probably inevitable
Hi pipbull, je suis de drumondville, au qu�bec, et toi?
Bonne semaine, nice week
Thank you everyones, I had doubts about martingale and I can see that I’m not alone. I think you can obtain good result during a time but when you lose, you can lose all your money on the same trade.
Conclusion : still away Martingale.
Have a nice week, Bammy
Hi.
I’ve tried Martingale in roulette several times… but as it’s been told, the ball don’t remember where it was last time, so you will loose at the end.
Eventually… you will loose all your money in the last “bet”. Remember… trading is NOT gambling. Poker isn’t gambling neither, it can be taught, and you can win (if you’re better than the oponent)… roulette is gambling, therefor you loose in the end! 
Martingale is a loosing technique, and should not be used 
a method to predict an inherently random system? now I’ve seen everything. I don’t need anything so fancy, just a method to predict a coin toss.
If you stick to one color only you do have a 50/50 chance each round. If you double your bet each loss, the most you will ever win is your initial betting increment. The law of averages says it can’t stay the same color forever. But since one loss after maybe 6-9 rounds will destroy you, what is to stop a pit boss (who has been waiting for that one long string of losses) from coming in and shutting the table down right before the next roll and telling you your stay is done. Then the house wins big time. All of your previous wins at that table won’t amount to anything compared to the blow you just took.
It is not 50/50. You are forgetting the 0 and 00. The only reason the house has an everlasting advantage at roulette is simply because those two numbers exist on the table.
Thanks for pointing that out. I am not a gambler and only assumed they were all red and black.
Hi,
I know this thread is a little bit old, however, I just want to point out that the martingale system can be used effectively if modified a bit. What I do is to use the martingale system with an automatic sell of +/-60 pips. If I miss four in a row I then go back and start over again. In that case I have lost 1+2+4+8=15. The reason this system makes sense to me is that the change of me getting four in a row wrong is aproximately 1/20. This is because I am not playing the roulette, I am trading forex and I have an advantage here and I learn from my previous trades. Another good reasson to do it is that you will have far more days where you make money than days you don’t, of course you will lose more on the days you don’t, but that shouldn’t matter if it is only 1/20 and not more than 1/15.
What is also important to remember is that you can be the type of trader who rarely loose many in a row but still loose more than half you trades. Then this system can be a huge advantage for you. On the other hand if you sometimes loose a lot in a row and other times win a lot in a row, you can still win more than half your trades and loose money on this system. What I am saying is that it is very individually if the system works or not.
I think many people have negative thoughts about the system because it have been used with the roulette so many times, where it obviously does not work and I would never recomend using it there.
I hope it all made sense;)
Interesting turns for sharing do you trade a martingale strategy regularly?
I would be interested in seeing the martingale strategy you use if you don’t mind sharing?
Thanks
Martingale is a perfect money management system. You only need an infinite amount of money to beat what is otherwise a mathematical certainty that you will go broke.
Whenever I trade I use the martingale system as I described. This mean I always set stop loss/take profit to 60 pips and that I start over if I loose four in a row and . This is also why I do not need an infinite amount of money. Otherwise, my strategy is based on the indicators from the Cowabunga system, (So You’ve Finished The School Of Pipsology…Now What? | Forex Blog: Pip My System). I do, however, not follow the Cowabunga system to the letter, I just use it to give me a good indication;) And then I try to also read some news to see what is going on. I hope that answered your question:) If you decide to try it, please leave a comment and let me know how it went for you.
Also, I am sure it would not work for everybody, I am just saying that it works for me, (because I rarely make the same mistake many times in one day). My advise is to look at your statistics and see how often you loose four or more in a row and make sure that you have 15 wins every time that happens.
As to JohnLeonard; I would like to point out that it is a mathematical certainty that you will break even, if you if you set a limit to how many times you double and the odds are 50/50. If the odds are not 50/50, you will either loose or win depending on who the odds are in favor of, which is why the system have a bad reputation since it has been used on the roulette many times.
Just want to remind you that betting will never get you closer to your ultimate goal. If you want to bet, simply go to Casino and it’s faster (to win or lose).
You can’t say that betting [I]will never[/I] get you closer to your ultimate goal, it depends on the odds and who they are in favor of. If the odds are in your favor, it would be unwise to not bet.
When that is said we were not talking about betting but using the martingale system as a tool to [I]trade[/I] more effectively, which I believe it can be used for;)
You would be better off following my money management thread…
If you have the guts to do martingale, just go all in every trade, for 20 pips a day… You cant loses more then 1 days worth of profits on a losing day, but you can string together a few winning days against a few losing days, its better then Martingale…